for the month of June 2018
From all accounts, the spring housing market, and particularly this May, has been an extremely busy one. Great news for all those who wanted to sell is that high buyer demand carried over from last year. However, along with it are inventory concerns in almost all of our Front Range markets, meaning everyone hoping to find and buy a house must be acutely aware of the current conditions and prepare themselves for the possibility of having to win over a home seller with an offer that exceeds all others.
Once the contract is signed, this does not a done deal mean! Diligence in the period known as “Pending” is vital. There are hurdles yet to be cleared: things like the home inspection, the buyer's financing being finalized, and the appraisal. Any of these can alter the deal, so astute attention to detail is a mainstay to success.
An encouraging sign is that a rising number of potential home buyers surveyed for Fannie Mae's monthly Home Purchase Sentiment Index say their income is higher than it was last year at this time. But will bringing home more money make them more likely to buy a house? We’ll be keeping our eyes peeled and let you know what the trend is in that department.
After the financial crisis and housing crash, a distant memory now, there were plenty of homes for sale but very few interested buyers. That appears to have flipped completely, with far more eager buyers in the market than there are homes available to satisfy that demand. Will price gains and mortgage interest rate increases bring a balance to inventory levels? It’s wait-and-see at this time.
Yet another encouraging sign is the National Association of Home Builders' Housing Opportunity Index shows we are making more money. In fact, median family income is up from $68,000 last year to $71,900.
Having calculated interest rates, median home prices of $532,250 and personal income along with all the other factors that help determine if it’s the right time to buy a house, 468 happy new homeowners did just that this past May in Boulder County.
If you want an accurate read of how many interested home buyers are active in the housing market right now, you can't do much better than a measure of appointments that were made to view the 763 homes available for sale in May. This number provides a pretty good snapshot, and with showings up 5.2% – a good indication that buyer demand will remain elevated and the number of building permits issued, a sign of future construction, which rose a bit over 7% are strong signs that inventory levels will be improving in the coming months.
Encouraging signs abound, this time for those wanting to sell a home. The difference between what a homeowner expects their appraisal to be and the actual appraised values is shrinking. Right now the national average difference is a mere 0.33%! That appraisal, the professional and lender accepted evaluation of a home’s worth, impacts sale prices more than any other factor, so the minimal distance between perceived value and appraised value speaks well for sale numbers to increase. Homeowners who believe they are getting their full equity are more likely to enter the market, increasing those thin inventory numbers and helping to spur the market forward.